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Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year. Granite.
Rock Inc. has three divisions, Granite, Lime and Nina. All fixed costs are unavoidable. Following is the income statement for the previous year. Granite. Lime Nina Total Sales $506,000 $271,500 $229,000 $1,006,500 Variable Costs: 177,000 124,200 100,300 401,500 Contribution Margin Profit Margin 329,000 147,300 128,700 605,000 Fixed Costs (allocated) 259,000 154,250 120,750 534,000 $ 70,000 $ (6,950) $ 7,950 71,000 a. What would Rock's profit margin be if the Lime division were dropped? b. What would Rock's profit margin be if the Nina division were dropped?
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